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Are you a small business owner or running a multi-stories showroom in Gurugram? Who finds trouble managing bookkeeping? Then this article is for you.

In this business world, bookkeeping has become essential to maintain accurate financial records. One cannot underestimate its importance, particularly for people who own small businesses trying for success.

In this article, let’s discuss the basic concepts of bookkeeping that are specifically targeted toward Gurugram business organizations and show the importance of bookkeeping in Gurugram, particularly maintaining correct financial records using bookkeeping software.

Understanding Bookkeeping Basics

Bookkeeping is known to be the backbone of any business. It helps businesses stay organized, and make decisions while following rules.

Bookkeeping is like the financial diary of a business. It involves the process of recording and organizing all the financial transactions, like sales, purchases, Banking, and expenses. All these transactions are first of all recorded in the Journal also known as the books of Original entry and then a Ledger also known as Secondary Books is prepared for all the Accounts used in the Journal. The main objective of bookkeeping is to maintain accurate and up-to-date records of all monetary transactions related to business.

Importance of Bookkeeping

The main significance of bookkeeping is given below;

• It helps businesses to keep track of their financial record.
• Businesses can make better decisions about their future.
• It helps to know the profitability of the business.
• Accurate bookkeeping is required to meet legal and tax requirements.
• It makes sure that businesses are following the rules and helps them avoid any trouble with the higher authorities.

Difference between bookkeeping and accounting

Consider bookkeeping to be the foundation and accounting to be the whole picture. Here are some differences between bookkeeping and accounting:

Bookkeeping	Accounting
Bookkeeping focuses on recording transactions in books like Journal, Ledger, etc.	Accounting involves the evaluation and interpretation of financial data by preparing Final Accounts like Trading & Profit and Loss Accounts and Balance Sheet.
Bookkeeping is the Primary stage of Accounting.	Accounting starts where Bookkeeping ends.
Bookkeeping is done by Junior Staff	Accounting is done by senior staff.

Advantages of Bookkeeping

Accurate financial records play an important role in ensuring the overall success of a business.

Here are some detailed benefits that businesses obtain by maintaining accurate financial records:

• Ensuring Financial Health of Business:

A detailed evaluation of a company’s financial health is made possible by maintaining accurate financial records, which give an understanding of its financial situation, including income, costs, and profits.

• Helps in decision-making:

Proper records of accounting help business owners make good decisions. Proper records assist in taking the right choices especially when it comes to managing finances, investing in new potential consumers, or reducing expenditures.

• Compliance with Legal and Tax limitations:

Accurate financial records are essential for meeting legal and tax requirements. Businesses are required by tax authorities and regulatory agencies to keep proper records and submit reports on schedule.

Getting Started with Bookkeeping

For every company, the first step to financial success is to start bookkeeping. To understand it properly, let’s divide it into three main parts:

1. Setting up a bookkeeping system:

Creating a bookkeeping system involves creating an outline that can track your financial activities. To start with, organize your documents clearly, such as bills and receipts. Take into consideration using bookkeeping services, digital tools, or folders to safely protect your papers. To guarantee accuracy and success, it’s essential to establish an organized process for recording transactions.

2. Choosing the right bookkeeping method (cash basis vs. accrual basis):

 The two main methods to take into consideration while choosing bookkeeping are accrual basis and cash basis.

Cash Basis	Accrual Basis
When cash is received or distributed, transactions are recorded using the cash basis method. For Example, Mr. Mohan sold goods on credit. After 10 days he received cash for the goods, Sales transactions would be recorded when cash was actually received(not at the time of sale on credit).	As per this system, transactions are recorded when they accrue, Whether Cash is received or not doesn’t matter. For example, Mr. Mohan sold goods on credit, He will record this transaction as a sale irrespective of the fact that Cash would be received later.
It is suitable for businessmen like running a factory, carrying on small/large businesses.	It is suitable for businessmen running a factory, carrying on small/large businesses.

3. Choosing accounting software:

Choose a bookkeeping software such as Xero, Zoho Books, Tally, and QuickBooks that will help you with your bookkeeping process.

*For small Business Owner- Busywin, Bahi Khata, Tally, Quickbooks

*For large Business Owner- Xero, Quickbooks, ERP, etc

These applications include a variety of functions and good user interfaces that will help you to efficiently manage your finances.

Buy bookkeeping software that fulfills the demands of the business and your budget, keeping in mind essential features like customer support and flexibility.

When choosing software, consider features like invoicing, tracking of expenditures, bank statements, business requirements, and reporting capabilities.

Here are some tips for using bookkeeping software:

• Take the backup of the data on a timely basis.
• Learn how to use it with training resources.
• Keep your records and software updated.
• Use automation to save time.
• Prepare Timely Reconciliation to track the completeness of the transactions.

Bookkeeping Best Practices

Best practices for bookkeeping are like the rules to maintain proper financial records. Here is a detailed review of the three best bookkeeping practices:

• Updating records regularly:

Maintaining proper financial records requires checking all your transactions. This guarantees that you will have accurate financial records, giving you a complete understanding of your finances.

• Reconciling accounts:

To confirm the efficiency of accounts, data is compared with bank statements and other financial records. This process guarantees that your finances are correct and follow the law.

• Maintaining proper documentation:

Accurate financial records help in auditing, and maintaining them is important. Here documenting receipts and financial records includes organizing and protecting all of the payments.

Types of Financial Statements

Financial statements are like reports that tell us about a company’s finances. There are mainly three types of financial statements, they are as follows:

Income Statement: A company’s income statement shows the total amount of money it generated and spent throughout a particular period. It tells about the company’s profit/loss.

Balance Sheet: This shows the financial status of an organization like an image. It lists the property, the debts, and the remaining money owed to the owners of the business.

Cash Flow Statement: This shows the source and direction of the company’s financial assets. It helps see how well the company manages its cash.

Tips for Small Business Bookkeeping Success

Here are some tips for small businesses for their bookkeeping success:

• Be regular to update your financial records.
• Verify your finances to make sure that they are proper.
• Use bookkeeping software to make things easier.
• Keep all transaction bills together for easy access.
• Get help from consultancies regarding any issues in finances.

Conclusion

Maintaining Bookkeeping is important for all the small businesses at Gurugram. As it provides accurate financial records that help to make informed decisions.

At Rebus Consultancy, we’re here to support you by providing bookkeeping services and allow us to assist you in achieving growth as we simplify your bookkeeping process. Reach out for inquiries or assistance.